Yeah, good morning, ladies and gentlemen. A warm welcome to all of you on behalf of the Management Board of 1&1. I would like to welcome you to our conference call on the third quarter. During this call, our CFO, Markus Huhn, will present the results and the status of our 1&1 mobile network, of course, followed by the guidance for the financial year. As always, we will take your questions after the presentation. Thank you very much [for]— I would now like to hand over to Markus. Markus, the floor is yours.
Thanks, Oliver. Good morning. This is Markus Huhn speaking, CFO of 1&1 AG. Warm welcome to our call this morning. As Oliver has mentioned, I would like to give you an update on our performance in the third quarter, as well as on the financial results as of end of September. Let us start with the customer contracts on slide number four. As end of September, we had 16.35 million contracts in our base, 12.38 million mobile internet contracts, and 3.97 million broadband lines in total, an increase of 90,000 contracts in the first nine months in 2024. In the third quarter, we have been stable in our base, means we have increased our mobile contracts by, or with, 20,000 new contracts and had a slightly decrease of - 20,000 broadband contracts. As you can imagine, we have not been satisfied with the development in the third quarter.
There are three influences on the net growth in the third quarter. One is an impact out of the network outage end of May, as well as an impact out of the migration process. And furthermore, we also have an impact out of the aggressive competition environment that has continued in the third quarter. The expected development for the fourth quarter is a comparable development in broadband lines compared with the third quarter. For the mobile business, we expect a stronger increase in the fourth quarter compared with the third quarter in 2024. On the next slide, revenue. Revenue in total was down by - 0.5% to EUR 3 billion and EUR 17 million. Service revenue grew with +2.5%. Other revenue, which is mainly coming out of smartphones and routers, decreased by -12.1% because of lower demand out of our customer base.
When we come to the EBITDA by segment, in the access segment, we have realized EUR 630 million EBITDA in the first nine months, which is an increase of +7.7% compared with the EUR 584 million in 2023. The EUR -167 million EBITDA in the segment 1&1 mobile network is reflecting our activities for the rollout and operation of the mobile network. Besides that, the EBITDA has been influenced by lower savings for national roaming because of the reduced network migrations in the third quarter. Now we come to CapEx. In the first nine months, we've spent EUR 70 million for CapEx, EUR 12.2 million spending in the segment access, and EUR 58 million driven by the rollout of our mobile network. Now we come to the status regarding the mobile network.
On the first slide, you see the landscape of our network infrastructure in the situation where we have 50% household coverage by the end of 2030. On the left-hand side, you see the four core data centers that we need. All the four core data centers are in process, o n operation. We need 24 decentralized edge data centers. 22 of them are already finished. We have the 500 regional far edge data centers and the 12,600 antenna sites that we need. Regarding the antenna sites, I have a separate slide in the presentation, and we'll come back later to it. On slide 10, we have listed the topics that are, in our opinion, the differentiation from O-RAN to a traditional network.
One is the open system with standardized interfaces, a partner company's landscape with almost 100 partners, and the independency of dominant manufacturers. Besides that, we are ready for real-time applications because all of the antennas are connected via fiber, and that leads to a situation that data processing is possible directly on-site in the far edge data centers, and the last topic on this slide, the low electricity consumption. After the start of our network in the first months, we definitely see a saving potential between 10%-30%, compared with a conventional network. On the next two slides, we have a short update about the latest developments. The first topic is the network development and operation, so in the last months, we had a significant work to expand the capacity. This work is completed.
Besides that, we spend a lot of effort in finalizing the core data centers, three and four. And these data centers are in operation since beginning of November. So far, we are doing approximately up to one— up to 10,000 migrations a day. And the target is to increase the number to 30,000-50,000 in the coming weeks, after the strongly reduced migration period between June and November, which was an impact out of the outage end of May. Besides that, we are in dialogue with partners. As we have mentioned in the past, there is a damage out of the network outage, and we are still in negotiations to compensate for the damages caused by the outage, and the target is with our partners to conclude the negotiations by beginning of January. Then a short update regarding the situation with frequencies. There are two topics.
One topic is the judgment from the Cologne Court that came up in August this year and says that the 2019 frequency auction ruled illegitimate. Unfortunately, the final reasons for the judgment are not available yet. That's something where the market is waiting for. There is a timeline of five months within the court has to come up with the reasons for the judgment. That means that latest end of January the reasons for the judgment should be available. And yeah, that's also the reason why no information is available from the BNetzA regarding the consequences that may arise from this. Then we have the consultation process regarding the low-band frequencies. So BNetzA seeks to extend frequency rights expiring at the end of 2025.
Due to the current situation with the judgment from the Cologne Court, a final decision is not expected before 2025. Important for us is that the interests of 1&1 regarding low-band access will be taken into account as part of an overall solution, so BNetzA made very clear that's for them important that we find also a solution in the process for 1&1. Our point of view is that prerequisite for this is that we will have sufficient frequency quantities at reasonable conditions to supply all of our customers, and we believe that the cooperative use proposed by the BNetzA is technically definitely feasible. Now we come to an update regarding the antenna locations. On the left-hand side, you see the number of antenna locations that we had at the end of the third quarter 2016, after the 1,781 at the end of the second quarter.
We have 1,249 antennas that are already where the base station is already installed. In the 741 locations, we have already the fiber connection. So that's also in progress, compared with the Q2 2024, where we had 926 locations with base stations, and some of them with fiber connection. Now we come to the financials for the first nine months. I would like to start with the P&L. I've already commented the revenue, so I start with the cost of sales. The cost of sales grew up from EUR 2.142 billion in 2023 to EUR 2.190 billion . This position is including EUR 219 million spending in the rollout operation and depreciation of our mobile network in 2024, compared with the EUR 96.7 million in the previous year. Therefore, gross profit dropped from EUR 889 million in 2023 to EUR 826 million in 2024.
Without these spendings for the mobile network, gross profit would have increased from EUR 985 million to EUR 1.45 billion , which is a plus of 6.1%. Costs for distribution increased slightly from EUR 387 million in 2023 to EUR 390 million in 2024. Administration costs are more or less unchanged at EUR 86 million in 2024. Other operating income is with EUR +27 million above the level in 2023. The impairments on receivables and contract assets grew up from EUR 77 million to EUR 89 million. So in total, a moderate cost increase driven by higher personal expenses, marketing, and the mentioned impairments on receivables and contract assets. The profit from operating activities in 2024 with EUR +287 million is below the result in 2023 with EUR 363 million, which is also driven by higher spendings for the mobile network.
Financial result with EUR - 1 million is below the result in 2023 with EUR +6.3 million . This is driven by a higher number of antenna sites, investments in white spots, and a lower cash position at United Internet. In summary, this brings us at the end of Q3 to a profit before taxes of EUR 286 million , EUR 90 million tax expenses, and a consolidated result of EUR 196 million . On the balance sheet, on the next slide, on the second last row, you see the balance sheet in total, which rose from EUR 7.740 billion to EUR 8.039 billion . So, a total increase of EUR 299 million . We have listed the main topics that are responsible for the increase, and these positions are blue-colored on the slide.
So first of all, receivables from affiliate companies is the cash position that we have at United Internet. This position is more or less on the same level as in last year with EUR 433 million. We have a strong increase in the inventories from EUR 178 million at the end of last year to EUR 128 million as of end of September. And last position on the asset side is the tangible assets. This position increased from EUR 501 million to EUR 720 million. And this is driven by the cash CapEx of approximately EUR 70 million, and lease CapEx coming from the antenna sites that we have leased in this year. On the liabilities, we have an increase on the long-term liabilities that are coming out of the leasing liabilities.
This position increased from EUR 170 million at the end of last year to EUR 314 million as of end of September. Now I would like to step up into the cash flow. Slide 17, the cash flow from operating activities is EUR 134 million compared to EUR 213 million in the previous year. The change compared to the previous year is mainly due to the changes in assets and liabilities, which are EUR -240 million for the first nine months in 2024, compared to EUR -171 million in the previous year. The change in assets and liabilities is therefore mainly influenced by the change in the deferred expenses, which includes the payment to Deutsche Telekom under the contingent contract. In addition, there are positive effects, especially from the reduction of inventory and the sales-related decline in the contract assets.
Cash outflow resulted from increased tax prepayments and a higher cash outflow from trade accounts payable compared to the previous year. So the change mainly is due to lower payments in 2023 as a result of a low level of liabilities at the end of 2022. The cash flow from investment activities is below 2023, EUR 73 million in 2024 versus EUR 181 million in 2023 because of lower investments in our mobile network. Cash flow from financing activities is with EUR -59.3 million, higher than in Q3 2023 with EUR 32 million , which is driven by payments to our partner for rollout, white spots and lease payments for antenna sites. So we finished the third quarter with a free cash flow of EUR 63 million versus EUR 79 million in the year before.
On the next slide, we have the bridge EBITDA to free cash flow. On the left-hand side, you see the EBITDA as of end of September with EUR 463 million. Then, the negative impact of EUR -22 million because of higher receivables and other assets. Positive impact of EUR 49.9 million because of the reduction of inventories, a positive impact by EUR 78.9 million because of lower contract assets. Then, the negative impact of EUR 234.7 million coming out of deferred expenses. And then the negative impact of EUR 47 million trade accounts payable, other working capital with EUR +5.9 million, EUR -160 million for taxes, and the already mentioned EUR -70 million for CapEx. So, in result, we are coming to EUR 63 million free cash flow at the end of September. Now we come to the outlook for 2024.
Service revenue, we see approximately EUR 3.310 billion after the EUR 3.243 billion in the year before. We see the EBITDA with approximately +5% to approximately EUR 686 million in the Segment Access , approximately +9% to approximately EUR 860 million. The Segment 1&1 Mobile Network , including the out-of-period expenses, with approximately EUR 14 million leads to a guidance of EUR 174 million. This position is also including expected compensation that we are negotiating with partners for the damage out of the network outage. Cash CapEx, we see approximately EUR 460 million after the EUR 295 million in the year before. So many thanks for your attention so far. Now I would like to hand over to the operator for the Q&A session.
Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to the first question. One moment, please. And your first question comes from the line of Ganesh Nagesha from Barclays. Please go ahead.
Thank you for the opportunity. A couple of questions from me. So for the year, you maintained the EBITDA outlook, which implies close to EUR 223 million EBITDA in 4Q. So could you please help us understand the key driver for this EBITDA growth? And my second question is on the competition outlook. So how do you see the subscriber trend in both mobile and fixed market going into 2025? You know, given the competition is clearly intensifying in the German market. So any color on customer acquisition and the subscriber trajectory would be very helpful. Thank you.
Regarding your first question to the EBITDA growth, in the Access segment in 2024, the main drivers are a result of the net growth in the last year, as well as, yeah, let's say our focus on worthwhile and good customers or good contracts. So we changed some offers in the last year in our campaigns. And therefore we generated in the last year a very worthwhile customer base. And that's the main driver for the EBITDA increase in the Access segment. Regarding the subscribers in 2025, as we mentioned in the last months, we definitely see an aggressive competition environment so far. That's something that continued in the third quarter.
In the fourth quarter, we see that we are able to generate a higher number of net ads. And due to changes in our campaigns, we believe in a positive development in terms of net adds for the next year. The question is, how aggressive will be the competition landscape, and the competitors' offers, in the next year? I t's not a question where we have an answer right now, but we believe in changes that we see that we would like to do in our offers, that we will definitely see a better situation in the next year.
Thank you.
Thank you.
Your next question comes from the line of Polo Tang from UBS. Please go ahead.
Hi. Thanks for taking the questions. I have a few different ones. The first one is just about free cash flow. How should we think about your free cash flow evolution over the coming years? And can you talk about the main moving parts? So specifically, can you talk about your data center CapEx? Because if you've completed the build for your four main data centers, should we expect the EUR 200 million of data center CapEx this year to go down to zero in 2025? And where are the other moving parts of your CapEx envelope? And then, can you also talk— second question is, can you talk about the pace of subscriber migration away from the Telefónica Deutschland network over to the Vodafone NRA? Are you going at the full run rate of 50,000 subscribers a day, or is the run rate much smaller than this?
And my final question is really, your guidance for service revenues implies about 1% service revenue growth in Q4 compared to nearly flat in Q3. So can you help us understand what is driving this pickup in terms of service revenues? Thank you.
Yeah, thanks for your questions. To your first questions regarding the free cash flow, we definitely see an increase in the next year for the free cash flow because in this year we had the last, let's say, a bigger payment to Deutsche Telekom regarding coming out of the contingent contract. Next year we still have a payment in advance to Deutsche Telekom, but this amount is much lower than that what we've paid in this year. So that will have a positive impact on the free cash flow in next year.
During the conference, when we have communicated the half-year figures, we have also mentioned that what we estimate for CapEx for the next year, which is also below the cash CapEx guidance that we have for this year. So, these are two positive impacts that we see on the free cash flow for next year. That what we can expect in this year is that what we see in the consensus is somewhere around EUR -200 million for this year. With the positive impacts out of the lower payment to Deutsche Telekom and lower CapEx, we see a positive impact in the next year on the free cash flow.
Regarding your second question to the migrations, so the situation so far is that all new contracts and customers are going to Vodafone national roaming agreement, and the customer base that is currently in the national roaming with Telefónica Deutschland or in the MBA MVNO, sorry, which is currently in the MBA MVNO contract, these customers we are migrating to Telefónica national roaming and then in the second step to Vodafone Deutschland. And as I mentioned during the presentation, in the last three months we had to reduce the migrations because of the capacity problem that we had in the network. And we are currently on the way to ramp up the number of migrations to the 30,000-50,000 migrations a day.
And we expect that within the next weeks, we are back to the maximum rate that we could expect out of the process. To your last question regarding the service revenue, of course, because of the weak net adds that we had in the second quarter, of course, it has a negative impact on the service revenue increase, due to the fact that we see a stronger fourth quarter and also believe that we are able to change the offers and our campaigns at the beginning of next year. We expect a higher number of net adds for the next year, which will also lead to higher service revenues.
It is not an easy decision because we do not want to do any campaigns where we just try to meet the offers or the prices of our competitors because the negative impact on the base, on the customer base, would be higher than the positive impact be out of the additional sales. And that's something where we try to, let's say, find a sweet spot where we have a higher number of net adds and no negative impact on the customer base, which leads at the end of the day to a higher increase in service revenues.
Thank you.
Thank you. Your next question comes from the line of Andrei Dr agolici from Kepler Cheuvreux.
Hello. Thank you for taking my questions. I have two. First one, if I'm not mistaken, you have a milestone in 2025 regarding your network deployment obligations for which you need to cover 25% of the population. So, I would like to know, you know, how do you see this milestones and what— how do you see your ability to reach this milestone by 2025? Secondly, coming back on the EBITDA, you have decreased your service revenue guidance, but you have not de—I mean, you have not changed your EBITDA guidance. And looking at Q4, if my math is correct, you would expect around 14% increase, EUR 230 million increase in EBITDA, while you will have a flattish service revenue year- on- year. So can you help us just understand how you managed to increase the EBITDA in the in the fourth quarter? Thank you.
Yeah, thanks for your questions. Regarding your first question, yes, we have this milestones— milestone in 2025 with the 25% pop coverage. It is an ambitious target, definitely, but at the end of the day, it will depend what will happen after the judgment of the Cologne Court. So at the moment, nobody is able what will happen next year, the situation so far because of the judgment of the Cologne Court. The question is, do we have an obligation out of this auction, which has ruled illegitimate, as we have mentioned earlier? Beside that, we are working very hard on this issue to try to meet this obligation in next year. But as I said earlier, it is a very ambitious target.
Regarding the EBITDA in the fourth quarter, yes, because of the lower service revenue, or the lower service revenue has also an impact on the EBITDA, but we still see chances to compensate this negative impact with savings that we can do in the OpEx, marketing budget, and other positions. So, there is still room to compensate this risk. So, that's the reason why I believe in the guidance that we have for the company.
Thank you. We'll now take the next question. And the question comes from the line of Keval Khiroya from Deutsche Bank. Please go ahead.
Thank you. And I've got two questions, please. So firstly, with the Q2 call, you talked about 2025 CapEx range based on whether or not you would find a partner for your passive infrastructure. Do you still expect to sell the sites? And will that happen in 2025? And then secondly, at this stage, would you be able to give us some visibility on how to think about the startup costs for the mobile network in 2025 compared to EUR 174 million in 2024? Thank you.
Yeah, regarding your first question to the passive infrastructure, as we have also mentioned in the half-year call, our target is still to find a partner that we can do, let's say, a kind of sale and lease back deal, so that we can rent the passive infrastructure that we build by ourselves. Currently, we are in a discussion with potential partners.
If we would not be able to find a partner in next year, it would be approximately an amount between EUR 100 million and EUR 150 million cash CapEx that we would have to spend for our passive infrastructure if we don't find a partner. Regarding the startup costs for the fourth quarter in the 1&1 mobile network, so due to the fact that we increase the migrations means that we will have a higher number of savings out of national roaming in the fourth quarter. This will have a positive impact. The OpEx in the fourth quarter, beside the savings, they will increase because we are rolling out the network means that we will have more antennas and more lease effort in the fourth quarter compared with the third quarter.
And beside that, we still believe in a compensation for the damages that we have out of the network outage. And the biggest damage out of the network outage is that we had to reduce the migrations. And then some, and that's something where we are currently in dialogue and in negotiations with our partners, to find a solution for this compensation.
Thank you. So at this stage, would you be able to give us any color on how we should think about this startup costs also for 2025?
For 2025, we see the EBITDA or the OpEx, no, the EBITDA for the 1&1 mobile network in the range that we see in the consensus.
Thank you.
Thank you. Your next question comes from the line of Ben Rickett from New Street Research. Please go ahead.
Hi, thank you. I have three quick questions. Firstly, on your mobile network EBITDA in Q4, did you mention that you're including a compensation payment receipt within that guidance? And if so, can you quantify how big is that compensation payment? Second question, you give sort of numbers on the number of sites and the number of sites with RAN and number of sites with backhaul. How many of those sites are actually carrying traffic today? That would be helpful. And then, third question is a sort of follow-up question just on the number of subscribers that have now been migrated to national roaming. I think it was 700,000 at Q1. Should we assume it's around 700,000 at the end of Q3 as well, given the pause in migrations? Thank you.
Yeah, thanks for the questions. To your first question, please understand that we are not able to give details to the amount of this compensation because we are currently in dialogue with the partners, and therefore we can't disclose this number. Regarding your second question, number of sites that are activated, I do not have the exact number, but coming from the number that we have mentioned on slide 13, the 740 sites with fiber. So there is a bit of delay between connecting the antenna with fiber and activating the antenna. I would say approximately 500-550 antennas should be activated. And the last question to the number of migrations that we plan for the fourth quarter, it will somewhere in the range that you've mentioned. We expect a bit higher number in the fourth quarter, but somewhere in the range that you've mentioned is a realistic number.
Okay, thank you.
Thank you. Your next question comes from the line of Usman Ghazi from Berenberg. Please go ahead.
Hello, thank you for the opportunity. I've got three questions, please. The first one was, can you indicate how many build-to-suit sites have been completed so far? I know that you give the sites in the presentation, but these are only co-locations, right? So I just wanted to know what the build-to-suit progress is. The second question , is this going to be discussions that you're having on the compensation?
In concept, are you in discussions with regards to, so I mean, is the way we should be thinking about this that had the network outage not happened, you had penciled in a certain level of migrations, and therefore a certain level of savings for 2024 and 2025. And because of the network outage, you're not going to realize that number of savings for 2024 and 2025. Therefore, your supplier needs to make you whole for the deficit. And I'm asking this because if this is the case, then that would mean that you would have a kind of a compensation for 2024 and then something again for 2025, which would mean that you are completely, you know, protected to the downside, because of the lost migration savings.
So just in concept, I know you can't say specific numbers, but just, you know, in terms of the thinking here, that would be very helpful for us to understand. And then finally, the final question was just going back to the, you know, the launch of your unlimited mobile kind of tariffs in Q4. You know, and I just wanted to understand the kind of traction that you have got for these offers. And if, you know, if you need to support this with more campaigns spend into next year, or do you believe that the price points that you have, you know, are good enough without any big marketing spend to improve your commercial momentum here? Thank you.
Yeah, thanks for your questions. To the first question, so the number of BTS, as of end of September are approximately 900 sites. In total, we have 2,016 sites, 900 of them are BTS, and approximately 1,100 are co-locations. Then, regarding the discussion that we have with partners for the compensation of the damages, your understanding is correct. We are talking about the damage in 2024, and of course, the delay of migrations will also have an impact in 2025, and this is also part of our negotiations. The gap will be going to be smaller and smaller compared with our initial plan.
After we've migrated all the customers, then we are, let's say, back on plan. But from this point, back to the period where we had to decide to reduce the migrations, there is a gap and a damage on our side. That's something that we are discussing with our partners. To your third question regarding the unlimited tariffs, we have added the unlimited tariffs in our portfolio in our shop. But we didn't start with any bigger campaigns. That's something that we are discussing at the moment, and will be a decision if we would like to do it. It would be a decision that we would start in the first quarter of next year. But at the moment, we are not doing bigger campaigns on the unlimited tariffs.
Okay. Can I maybe follow up on these questions with what— why would you have launched the unlimited in the shop and not supported with campaigns? Is — any kind of clarity there would help, because I guess the fear would be that, yes, you've launched these unlimited tariffs, but the NRA with Vodafone, you know, doesn't support the economics of these tariffs. Could you perhaps give some reassurance that these unlimited, you know, that the NRA allows you to make a margin on these tariffs? So that was the first question. And then, just on the discussion with the partners, I mean, you know, what is the likelihood of a positive outcome here? I mean, is it like 50/50? Is it more than that? Thank you.
Yeah. To the unlimited tariffs, with the Vodafone national roaming agreement, we are able to offer such tariffs. So with the Telefónica national roaming agreement, maybe it could be a problem from a commercial perspective. Therefore, the national roaming agreement with Vodafone is better for us or allows us to offer unlimited tariffs. Our target in the fourth quarter is to bring these tariffs on in our shop. That's what we already did. Now we would like to find out which tariffs or does it work with the tariff structure that we have in our shop? The fourth quarter is important for us to get a better understanding of the customer behavior.
Also, in Q4, we will decide whether we will start a bigger campaign at the beginning of next year or not. The fourth quarter is to find out what could be the best way for us for next year. Regarding the discussion with our partners for the compensation, of course we see the chance bigger than 50% because otherwise we would not be able to take it into our guidance. But please understand, it's difficult to say exactly what we expect. I can say, we are in good discussions with our partners on a regular basis. Every two weeks we have meetings. And in our opinion, we are making progress in the negotiation. And therefore, we see it still positive that it will have a positive outcome for us.
Thank you very much.
Thank you. Your next question comes from the line of Ulrich Rathe from Bernstein. Please go ahead.
Yeah, thanks very much. I have three questions, please. The first one is, with regards to this compensation in the fourth quarter that you're expecting. I don't remember discussing that, on the 2Q call when you guided down the EBITDA. So at the time when you guided to EUR 686 million for the year in 2Q, was that already including the compensation at that point in time? Or is it that you can maintain the EUR 686 million on the basis that, yes, the third quarter was maybe a little bit weaker, I think, in the report you're talking about disappointing performance versus own plans? But you have this compensation now shaping up, and therefore the full year is, is safe. I'm just interested in this, in this timeline, of the discussions that lead you into these guidance statements.
The second question is, so, so you're missing essentially five months of migration or with, with no or very little migration, and to, to the NRA. And I was just wondering, there is, there is a regulatory deadline. I do remember Mr. Dom were talking about, you know, how the deadline is actually a bit of a stretch goal already without the network issues in May. I think he talked about, you know, that being a pretty tight plan to begin with. So, apart from the phasing of the migration, could you talk about the ability to actually reach the regulatory deadline based on, you know, having missed out on this for five months now? And the last question is, you mentioned that competition is aggressive, and it sounded like you're expecting a slight easing in 2025.
You didn't say so, but the context of what you were saying sounded like you're expecting a bit of an easing. What would be the reasons to expect easier competition? Is it these statements from Mr. Haas, that you know, the surplus capacity on the telephone network is essentially been filled by now? Or was it any other reason that makes you sort of slightly confident on the competitive outlook? Thank you very much.
Yeah. Regarding your first question, when we have communicated the half-year figures, the situation was, yeah, for us at that moment clearer as today. So we didn't imagine that we will have a five-month break of the migration. And we thought that we would be able to come to a faster solution with our partners regarding the damage. So basically, we saw a risk because of the lower migrations and the lower savings for national roaming during the half-year call. But we thought that we would be able to find a solution for that within the third quarter. So, after the third quarter or in the current situation, as I mentioned earlier, we are still in negotiations with our partners. And also we have the situation that we had the four— the five-month break of the migration.
So, the amount that we see today that we have as a damage out of this issue is bigger than expected in August this year. Regarding to your question, are we able to fulfill the migrations within the timeline that we have from BNetzA? We are still believing in that it is possible. So we have to finalize the migration until end of 2025. And, if we are back to the run rate that I've mentioned earlier, then we would be able to fulfill the migrations, I would say, November next year. That's still in the timeline that we have to finalize the migration. Regarding the competition in 2025, yes, the most aggressive player in the market is Telefónica Deutschland. In the third quarter, they have been as aggressive as in the first half year.
The question is, does it make sense from a Telefónica perspective to go on with it in the next year? Because they are generating more than 200,000 customers in a quarter. But at the end of the day, with very low price, and I'm not sure whether it makes sense or whether they are able to continue with these offers the whole next year. We would expect that they would go back from this aggressive line maybe somewhere between the current situation and that what we've seen earlier. Yeah, that's what we expect. And therefore we try to come up with new offers, with new campaigns, at the beginning of next year.
Very clear. Thank you very much.
Thank you. Your next question comes from the line of Ayesha Mansoor from BNP Paribas. Please go ahead.
Thanks for taking my question. I have two. Can you, firstly, can you help explain the guidance, please? EBITDA's already down 14% in Q3 and you've spent EUR 167 million of the EUR 174 million which you guided for network investment this year, so what is actually going to drive the big rebound [in the big] Q4 to allow you to hit the guidance? You mentioned OpEx marketing budget. Can you quantify, is it also that you'll stop investing in the mobile network? Or is there actually a risk that you would have to revisit this guidance again in December as you've done in previous years? So that's the first part.
And then secondly, which partners are you likely negotiating with on the network outage? Last year— last conference call, you seem to take responsibility for this issue and signaled your intention that it wouldn't happen again. How does it relate to the fact that you've also agreed to pay Rakuten more money this year to take some of their inventory, which they've been building up on your behalf? That's it from me. Thank you.
To your first question regarding the guidance, two big issues to reach the guidance are savings and OpEx reductions in the fourth quarter and the mentioned compensation for the damages out of the network outage. These are the two big issues for the fourth quarter that we see to reach the guidance. Regarding your question with which partner we are negotiating, please understand that we would not give any details to it. But as you know, we have mentioned the big partners that we have in our mobile network, and with all of these big partners, we are negotiating to find a solution for compensation for these damages.
Got it. Thank you.
Thank you. Your next question is a follow-up from Andrei Dragolici from Kepler Cheuvreux . Please go ahead.
Hi. Thank you for taking my questions again. Just one clarification on the EBITDA guidance that you guide at EUR 686 million for full year. Does this include any kind of compensation? So is there a risk to this EBITDA guidance, to this forecast for 2024, or any eventual compensation that you get in Q4 would be increasing this guidance? That would be the first one. Second one on the network, how many mobile sites you would need to have activated to reach the milestone of 25% population coverage? Thank you.
Regarding your question to the EBITDA guidance of EUR 860 million, yes, there is a compensation included that we are negotiating with the partners. And yes, if we are not able to find a solution and the compensation with our partners, there is a risk in the guidance. Regarding the network, how many sites do we need for the 25% pop coverage? That are approximately 6,000-6,500 sites that we need.
Activated and running, you mean? Yes?
Activated. Yes.
Yes. Thank you.
Thank you. There are currently no further questions. I will hand the call back to Oliver Keil.
Thank you very much, operator, and thank you to all of you for the questions. We should now end the call, and our dearest colleagues will take over at 12:00 . So far, yeah, as usual, we are here for further discussions in the afternoon after the United Internet call. Wishing you all the best, stay healthy, and see you soon. Thank you.